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The Insolvency Regime for Large Enterprises in Italy: An Economic and Legal Assessment

Author

Listed:
  • Nazim Belhocine
  • Mr. Daniel Garcia-Macia
  • Jose M Garrido
Abstract
The modernization of Italy’s insolvency framework has been the subject of much interest in recent years, related not least to its role in potentially facilitating an efficient allocation of resources. A unique feature of Italy’s insolvency framework is a special regime for large enterprises known as “extraordinary administration”. This paper evaluates the merits of this special regime by assessing its efficacy and success in achieving its stated goals and comparing its features to international standards and best practices. It finds that the special regime tends to impose large costs on creditors and the state. The regime results, in most cases, in the sale of parts of the group, followed by a liquidation phase of the remaining assets which can take longer than the general regime, hindering legal certainty for creditors and more generally economic efficiency, investment and job creation. Based on international best practices and experience, consideration should be given to folding the special regime into the general insolvency regime, possibly with provisions to allow for state intervention in specific well-defined circumstances.

Suggested Citation

  • Nazim Belhocine & Mr. Daniel Garcia-Macia & Jose M Garrido, 2018. "The Insolvency Regime for Large Enterprises in Italy: An Economic and Legal Assessment," IMF Working Papers 2018/218, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2018/218
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    References listed on IDEAS

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    1. Luisa Carpinelli & Giuseppe Cascarino & Silvia Giacomelli & Valerio Vacca, 2017. "The Management of Non-Performing Loans: A Survey among the Main Italian Banks," Politica economica, Società editrice il Mulino, issue 2, pages 157-188.
    2. Matteo Bugamelli & Francesca Lotti & Monica Amici & Emanuela Ciapanna & Fabrizio Colonna & Francesco D�Amuri & Silvia Giacomelli & Andrea Linarello & Francesco Manaresi & Giuliana Palumbo & Filippo , 2018. "Productivity growth in Italy: a tale of a slow-motion change," Questioni di Economia e Finanza (Occasional Papers) 422, Bank of Italy, Economic Research and International Relations Area.
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    Cited by:

    1. Nazim Belhocine & Mr. Daniel Garcia-Macia, 2020. "Identifying Service Market Reform Priorities in Italy," IMF Working Papers 2020/039, International Monetary Fund.

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